Almost Entire Obamacare Premium Increases Paid for By Taxpayers

 The underlying Obamacare subsidies are inflationary—meaning that they result in higher premiums and health care costs. That’s because the subsidies cap what enrollees must pay, and taxpayers cover any amount above that cap, no matter how expensive the premium gets.

This Paragon Pic shows how much of a benchmark ACA premium is paid by taxpayers versus enrollees for a 50-year-old at twice the federal poverty level (roughly the age and income for the average ACA enrollee). The orange amount is the enrollee share, and the navy amount is what the federal government covers.

In 2014, taxpayers covered 68 percent of costs. From 2014 to 2020, the total premium increased from about $4,500 to $8,000. The enrollee amount stayed almost flat during this period as taxpayers picked up almost the entire cost of the premium increase. By 2020, taxpayers covered 80 percent—a significant increase from Obamacare’s first year.

From 2021 to 2025, Biden’s COVID credits (in light blue) replaced much of the enrollee share with new subsidies. That increased the government’s share of the premium to 93 percent of the cost. By comparison, KFF found that in 2024, enrollees in employer-sponsored plans paid on average 25 percent of their premium. (Economic theory shows that employees pay all of the premiums in the form of foregone wages.)

After this year, the COVID credits expire. But the underlying Obamacare subsidy will still cover more than 80 percent of the typical enrollee’s premium—a massive subsidy.

https://paragoninstitute.org/paragon-pic/almost-entire-obamacare-premium-increases-paid-for-by-taxpayers/